The National Geothermal Association of the Philippines (NGAP) is batting for the retention of incentives enjoyed by the renewable energy (RE) sector under the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA).
“(We are) in talks with colleagues in Congress … to make sure the renewable energy incentives stay in place,” said Joeffrey Caranto, NGAP president.
Caranto told reporters at the sidelines of the 1st Philippine International Geothermal Conference in Taguig City yesterday the country has been dethroned by Indonesia last year as the second biggest producer of geothermal energy in the world.
He said this is because Indonesia can sign up power purchase agreement contracts up to 25 years and grants a lot of incentives that help the private industries develop geothermal power.
“We are advocating with the DOE (Department of Energy) to come up with some sort of regulations or incentives that will also help the local industry,” Caranto said.
Some of the incentives that are being enjoyed by clean energy developers under the RE Law include income tax holiday for the first seven years of commercial operations aside from duty free importation of machineries and equipment for the first 10 years.
They are also entitled under certain conditions for special realty tax rates on equipment and machinery; net operating loss carry over; corporate tax rate; accelerated depreciation; zero percent value added tax rate; cash incentive of renewable energy developers for missionary electrification; tax exemption of carbon credit; and tax credit on domestic capital equipment and services.
According to data from the DOE, as of end-2018, the total installed on-grid capacity of geothermal power plants experienced a minimal growth at 1,944 MW compared from 2017’s 1,916 MW with an overall share of 8.2 percent from the previous 8.4 percent of the power mix.